The rating agency recently completed its review of group, which includes Blackstone Group LP, Carlyle Group LP, and KKR & Co. LP.

In particular, a large portion of the firms’ fee revenue is locked in and leverage remains modest, the report notes. As well, investors are increasing their allocations to alternative investments.

Growth in fee-earning assets under management re-accelerated in 2017, the report says, “as several flagship strategies came to market during the year to raise capital.”

Fundraising is expected to remain strong in 2018, as “firms expand their product offerings and limited partners continue to consolidate capital with the largest managers in the sector,” the report adds.

With assets expected to rise next year, management fee revenue is set to grow next year as well, it says.

The report notes that margins improved modestly in 2017, as many alternative managers “continue to realize the scale benefits of follow-on funds and adjacent strategies.”

For the specific firms that Fitch rates in the sector, it affirmed every company’s ratings with stable outlooks; except for Apollo Global Management LLC, whose rating outlook was revised to positive from stable.